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How Can a Retail POS System Help Manage Coupons?

Image showing scissors and clipped coupons

Coupons are taking on a digital life in a post-recession economy, and retail POS integration can help retailers manage and customize their coupon promotions to maximize their return.

An article on the MediaPost website takes a look at how digital coupons are faring.

  1. Uptick in use: Digital coupons are experiencing “double-digit growth in distribution and redemption,” the article reports. Print-at-home coupons have a 6.1 percent redemption rate, while paperless coupons are being redeemed 2.5 percent of the time, according to research conducted by NCH Marketing Services, a unit of Valassis.
  2. A mix of media: Suzie Brown, executive vice president of sales and marketing at Valassis, says retailers are expanding digital coupon formats on a small scale. “For marketers, it’s about finding the right media mix and defining the coupon characteristics to both activate consumers and still drive ROI for their brand,” Brown tells MediaPost.
  3. Redefined value: Other coupon trends include shortening the timeline for redemption by nine weeks, or 3.2 percent, and requiring multiple purchases for coupon savings.

Coupon management is an important part of retail POS integration. For example, a mobile app should be able to combine all of the coupons that a consumer wants to use into one scan, rather than each individual coupon having to be scanned at the register.

There are two kinds of coupons: manufacturer coupons and store coupons. For most manufacturer coupons, the retailer receives payment for the customer’s buying decision. So, if a customer scans a coupon for $1 off of a bag of coffee, the manufacturer reimburses the store for that $1. With store coupons, it’s considered a discount that the retailer is choosing to offer. Therefore, if the retail price of the coffee is $5, the store only receives $4 for that purchase.

With manufacturer coupons, there needs to be some kind of tracking piece to validate how many coupons the retailer processed. Also, the electronic coupon must be uniquely identified somehow so that it can’t be redeemed repeatedly.

Take an in-store coupon, for example. If a customer buys a bicycle, the receipt (paper or electronic) may contain a coupon that entitles them to receive 50 percent off on a bicycle bell during their next visit. The retailer only wants customers who purchased a bicycle to be able to take advantage of that deal. A retail ERP system can uniquely identify that coupon with a serial number so that it can only be used once.

The ability to track the effectiveness of a coupon promotion is also a best practice. For example, tracking the data so that you know how many of your customers took advantage of a particular coupon is good information, but being able to break down customer usage by demographic and also knowing what items were in the customer’s basket along with the item purchased with the coupon can give you the edge you need to pass up the competition.

The bottom line is that coupon use is returning and digital distribution is playing an important role in driving that growth. Retailers would be well advised to have a retail ERP system that supports robust coupon management.

Source: MediaPost News, July 2013